The Asian Century

The World Order has been constantly changing. Before 1 Century AD up until the 17th Century, India and China dominated the world economy and order. Post 17th Century with Trade and Military Expeditions began a new wave of colonization that shifted the world order to European nations like British, France and Germany. Post WW-1 and WW-2 the world order one again shifted to USA after relinquishment of Colonies by British and other Colonizers of Europe. The world order during the cold war remained Bi-Polar between US and Soviet Union and post the disintegration of Soviet Union in 1990s, United States emerged as the sole super power in the World. The Balance of Power is slowly once again shifting to a bi-polar and multi polar world where countries like China and India will be the Growth Engines of the world. In this sense it would be fair to call the 21st Century as ‘The Asian Century’.

The shift of Geopolitical order back to Asia after nearly 4 centuries will be marked with the rise of India and China as the powerhouses driving World Economic Growth. With a combined population of nearly 2.5 Billion and vast demographics; India and China will be the biggest markets for the oil producing nations in West Asia and leading the revolution in technologies, manufacturing etc. While countries like India, China, Singapore, Malaysia, Japan, South Korea and Indonesia will drive growth in the region and the world, simultaneously Asia will also be at the heart of various conflicts from West Asia to Central Asia to South Asia to South China Sea that could stunt the meteoric rise of powers like China and India specifically. Disputes like Palestine, Chechnya, South China Sea will drive conflicts in the region between global and regional powers. The advent of Ultra Extremist Groups like ISIS, Al-Qaeda and a fertile recruitment base in South and South East Asia will be the next big challenges Asia will face. Apart from these challenges, on the whole this century will mark the shift of the world order to Asia- being both the center of world growth and troubleshooter to the problems that would emerge from ensuing change in World Order.

China: The Driver of ‘The Asian Century’

People’s Republic of China will be front runner in the ‘The Asian Century’ being the growth engine of the world. With more than 1.3 Billion people and the 2nd largest economy of the world at approximately 10 Trillion $ after United States, China would have substantial say in how the region and the world as a whole shapes up. China’s recent moves of setting up regional Banks like AIIB and projects like OBOR (One belt one road) clearly spells out its efforts to foist its Regional and Global order as the one opposite to US also known as ‘Beijing Consensus’. China has vastly expanded its Resource base from Central Asia to Africa to Latin America where it is using its soft power and economic might to dole out cost effective infrastructure and services in return for precious minerals that it uses as collateral for loans, finances to maintain the flow of liquidity in its economy.

While China has rapidly grown over last 2 decades with a growth rate of 12%+ it is now showing signs of slowing down. Since Lehman Brothers collapsed in 2008, the level of private domestic credit in China has risen from $9 trillion to an astounding $23 trillion. That is an increase of $14 trillion in just a little bit more than 5 years. The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the subprime bubble, or in Japan before the Nikkei bubble burst in 1990. This is beyond anything we have ever seen before in a large economy. Even China’s debt is a ticking time bomb. According to Mc Kinsey Global Institute Report (MGI) China’s debt has quadrupled from 7 Trillion $ in 2007 to 28 Trillion $ as of mid 2014 reaching 282% of GDP- higher than the level of United States. At this pace China’s debt would reach 400 % of GDP by 2018 equivalent of Spain. Almost 9 Trillion $ of debt is directly or indirectly linked to Real estate including most of the loans by the shadow banking sector with loans of 6.5 trillion $. MGI said the Chinese economy accounted for more than 1/3rd of global growth in debt since 2007 with largest drivers being borrowing by non-financial corporations including real estate developers.

China’s economic model of a Communist State having its own Oligarchy is now showing signs of a burn out and things if not addressed adequately could lead to a hard landing of Chinese economy which could lead to murmurs of dissent against the prevalent system of China’s Communist Party Rule. The Chinese stock market crash where 7 Trillion $ was lost in the month of August, slowing manufacturing growth, ghost cities, bailout to shadow banks and financial corporations are just part of the Mega Ponzi scheme that has been running in China since Deng’s time of mid 80s. Thus its economy could face a hard landing unless it advances critical reforms like giving autonomy to local self-governments for taxation on property, financial reforms’, allowing the Yuan to float freely at the market rate, opens up sectors like Real Estate, Insurance and Securities etc. to enable a flow of liquidity in economy. Rate cuts alone from China’s Central Bank won’t suffice in slowing the slide.

China’s President Xi Jingping faces a moment of reckoning not only at home but even abroad as to how he deals with a slowing economy that could lead to social unrest in his country that the Communist Party of China has been able to subjugate in the name of burgeoning growth for decades. One of the pit falls of China’s Rigged Economics has been the rise of Shanghai Oligarchy within the ranks of Communist Party that is relishing the challenged posed to Xi and giving formidable resistance to Chinese president. Factional struggle between the Young Communist League (YCL) headed by outgoing President Hu Jintao and the “Shanghai gang” led by former President Jiang Zemin, its members share common characteristics. They have no connection with the 1949 Chinese revolution and represent the new property-owning elite created by the regime’s program of restoring capitalism over the past 30 years. Xi Jingping was a compromise figure, agreed by the two main factions. Only Li Keqiang, the incoming premier, is associated with the League faction. Two other members, Liu Yunshan and Wang Qishan, are acceptable to both factions. The other three, Zhang Dejiang, Yu Zhengsheng and Zhang Gaoli, were closely associated with the Shanghai clique.

Xi Jinping rose to power because of his father, Xi Zhongxun, a senior bureaucrat purged by Mao in 1965 for being a so-called “capitalist roader.” His father’s career was revived after Deng Xiaoping came to power in 1978, and appointed him to establish the first “special economic zone” in Shenzhen. The young Xi spent 22 years in the eastern coastal provinces, such as Fujian and Zhejiang, where he became known for fostering private enterprise. Xi’s extended family members have amassed a fortune of $367 million, including shares in a state-owned rare earth company. Often, CCP leaders use relatives’ names or even false identities to hide their interests. The premier Li was the man behind the China 2030 report, co-written with World Bank giving a blueprint to further open up the Chinese economy to global capital, including by privatizing most remaining state enterprises. It isn’t coincidental that Li Keqiang who co-authored China 2030 report along with World Bank is now the Prime Minister of China under President Xi, while the top executives of AIIB and World Bank signed an MOU few months back on joint funding of projects and are scheduled to meet and firm up the agreement on President Xi’s state visit to Washington DC in September 2015. It also isn’t co-incidental that China’s dumping of US Treasuries is indirectly creating demand and growth in US Economy. Wheels within wheels tell you the real picture after you carefully examine the events.

It would be thus fair to state that China in the last few decades has followed the same path of Boris Yelstin’s Russia of 90’s where a rigged economic model of benefiting few in ruling elite put the whole economy under duress. The economic mismanagement accompanied by factional tussles could open up fissures creating social upheavals in already sensitive provinces like Xinjiang, Hong Kong and even the Autonomous Region of Tibet. While China will continue to be the main driver of the Growth in 21st century, it will have to implement structural and transparent reforms to sustain its economic prosperity. The success of the same could very well define the extent of social harmony or disharmony among various classes like Peasants and elements inside PLA.

In sum and substance it would be fair to state that China will be Rising Global Power of 21st Century but that rise will be riddled with internal and external fault lines that will rupture time and again adding to quandary the Communist Party of China faces i.e. either reform or perish to a prolonged period of slow economic growth and the resultant social unrest.

India’s Role in ‘The Asian Century’

Apart from China, India is being touted as one of the fast growing economies in the world with GDP at 7%, which could surpass China’s GDP growth rate owing to its slowdown. India with a population of 1.2 billion people is a burgeoning economy that has grown leaps and bounds over the last 2 decades creating one the largest consumer markets that no World Economy can afford to ignore. At a critical juncture when the world faces a slowdown in economic growth, a stunted China and conflicts all over, India shines as a glimmer of hope in the vast ocean of commercial despair.

Much has been said about the Indian PM Narendra Modi’s historical mandate in May 2014 and the economic reforms that were promised to be unleashed. India though a vibrant democracy, faces its inherent contradictions from an aspiring Neo middle class to an agrarian based economy that still lives in the olden days of socialism. Despite the efforts made by Indian Government on reforms like Insurance, FDI in Railways and Real Estate, the efforts have not yielded the desired results and crucial reforms like Taxation and Land Laws are stuck in the Parliament. Measures like Black Money Bill, Trade Unions and the slow pace of bureaucratic structure inherited from the British Raj have also spooked the investors on betting big in India. India is the land of opportunity owing to its dynamic democracy and demographic dividend of 65% population being under age of 35 years, yet it needs to shake up the sluggish pace and move faster on sectorial reforms like Taxation and IPR and needs more investment in rural Infrastructure, Public health and safety, Energy and Education to create real growth and empower people from top to bottom of the Pyramid and the cross-section of society.

Along with its growing economy and various bottlenecks, India too faces external and internal threats- from Naxalism to the Insurgency in North East to the Jihadi Terrorists being abetted from areas in Pakistan and its occupied Kashmir. India has one of the largest armies in the world and is one of the world’s largest importers of Arms just behind Saudi Arabia. The modernization of Defence procurement initiated by Govt of India under its flagship scheme of Make in India has taken off quiet well with DTTI agreement with US, Russian Chopper Deal in Collaboration with Reliance and Barak Missile jointly developed by India and Israel. Despite the impetus on Make in India, India will need to invest into R&D in Defence and other technologies as innovation is the key to India piping China in the race for 21st century leadership. It is rather ironical that like President Xi in China, Indian PM Narendra Modi is facing severe resistance from the Indian Corporate Czars and their deeply entrenched system that is resisting the reforms that threaten to take away their influence in Policy Matters of the Government. Herein lays the biggest challenge and the test of Indian Democracy and its political system on whether it rises to the occasion or squanders the opportunity to take the lead in ‘The Asian Century’.

Afghan – Pak and the SAARC Region

Apart of the two Economic Power houses India and China, the Afghanistan-Pakistan Region will be crucial to Asia’s Security scene and the larger Geo Political theatre. Afghanistan has infamously been called the Graveyard of Empires from the time of Mongols to the British to the Soviets. Afghanistan presents a crucial gateway to Gas and resource rich nations of Central Asia. With Iran Nuclear Deal going through the race for top Honours in Afghanistan and larger Central Asia has just warmed up. Afghanistan is crucial for security of South Asia and rather important to countries like Russia, China, India, Iran, US and of course its neighbor Pakistan. Afghanistan fits in the geo political matrix of the world and regional powers due to its opium production of 90% of the world’s total production that has fuelled Global Islamic Jihad in form of Al-Qaeda, Taliban and even ISIS which is a big issue for powers like China (re Xinjiang province),India and Central Asian states, that could affect peace and security in Russia as well neighboring states like Pakistan and Iran which are already facing the blow back of the Jihadi Frankenstein unleashed decades ago.

The Chaos is Afghanistan cannot be seen in a separate light from the rise of Jihadi Monster in Pakistan that it itself created in collaboration with Americans and Saudis to dislodge the Soviets in 80s. Pakistan Intelligence Agency ISI’s and its Military till date maintain a powerful grip on the country’s foreign policy be it -its Backyard Afghanistan or its perceived existential enemy India. Pakistan’s Role in playing coy with Afghan Taliban and Haqqani Network has lead to dissident Pashtun warlords forming the splinter group Pakistan Taliban in 2007 under the leadership of its slain leader Betullah Mehsud who have been fighting against the Pakistani State. Pakistan’s economy unfortunately doesn’t have much to talk about and is primarily dependent on US Aid and China’s economic help in form of Gwadar Port and CPEC connecting it to Karakoram. Pakistan, though an economically failed state is an international migraine but is being backed by China to counter India’s global ambitions of challenging China’s hegemony. China has been rather engaged with Quetta Shura or Afghan Taliban since mid 90s when it first swept to power in Kabul. Both China and United States have used various tactics to charter some peace and power sharing agreements between Afghan Govt and Afghan Taliban. Even Iran and Russia have keen interest on happenings in the Af-Pak Region as the region could once again become the Global Highway of Jihad with groups like ISIS and various Tribal War lords opposed to Pashtun Dominated Taliban taking on each other. Things could really get ugly and its lies in the interest of the world powers like US, China and Russia that a Nuclear Armed Pakistan holds as one cohesive unit, while attempting to bargain some kind of peace in Afghanistan.

The other SAARC countries like Nepal are also at cross roads especially in wake of the devastating Himalayan Quake of April 2015 and the escalating violence in the Terai Regions of Nepal over rights and representations in the new constitution. Ever since the Massacre of the Nepalese Royal Family, the once beautiful Himalayan Kingdom has now been at a constant tussle over the nature of state it would like to adopt. Nepal is plagued by the ills of Maoism, a slowing economy and the fight to regain its identity as a lone Hindu State in the world. India plays a crucial role in not only backing up neighbors like Nepal and Bhutan but also as an arbiter given the close cultural and civilizational ties it shares with these Himalayan States. Bangladesh plays an equally important role in India’s security architecture in wake of infiltrations across the border in West Bengal, Assam and the radical movements like Jamaat E Islami backed by various actors like ISI of Pakistan. It lies in India’s interest to support Sheikh Hasina Govt that has cracked down on terrorism originating from Bangladesh.

Sri Lanka and Maldives play a crucial role in India’s Maritime Security Architecture. India has a big stake in the events in Sri Lanka that has recently emerged from the bloody civil war with LTTE in Northern Areas of Jaffna. Chinese Port cities of Hambantota and the docking of Chinese submarines in Sri Lanka as part of String of Pearls policy that directly undercuts Indian Navy dominance in Indian Ocean region raised many eyebrows but the loss of Mahinda Rajapksha to President Srisena has been a welcome change for India. The Chinese Dragon’s designs are further displayed by getting cozy with Maldives, which could directly under cut New Delhi’s Influence in IOR. Though Maldivian Government has cleared that it has no intention of leasing any military base in its waters that threatens India yet India should tread with caution and watch Maldives carefully given the rise of Jihadi Elements like ISIS who are actively engaged in recruitment over there.

ASEAN and the Pacific Rim

Apart from the usual hot spots like Af-Pak, another region to watch out is South East Asia from Myanmar to Thailand to Malaysia to Vietnam. Democracy in Myanmar has been very fragile. While limited representation has been given, Myanmar is an important cog in the wheel in connecting South Asia with South East Asia. Myanmar could not only play an important part of trade route from India to Thailand but also ensure that the Naga Rebels in its Northern Territories like NSCN (K), Kachin Rebels in province close to China are contained. Myanmar also plays a crucial role in Curbing Narco Terror originating from the infamous Golden Triangle along with Thailand where drug proceeds are used to recruit and train terrorists by organizations like ISIS, Al Qaeda and many Intelligence agencies like ISI. The persecution of Rohingya Muslims in Myanmar and the refugee influx into other SE Asian Countries has created a situation where these refugees are susceptible to radicalization and indulging in acts of Terror. It is thus in the interest of countries like India, China, Myanmar and Thailand to ensure that a solution is found to the demographic crisis in Myanmar and its fragile democracy is supported else the blowback could again be bloody. Along with Myanmar, countries like Vietnam, Philippines and Indonesia play a pivotal in the region’s Trade and Economics specially the ASEAN Bloc – something that powers like India could utilize as Bulwark against China’s hegemonic designs in the South China Sea. India’s naval outreach from Andaman Sea to South China Sea could help it counter China’s string of pearls by strategic partnerships with countries like Vietnam and Philippines.

West Asia Region

This is one of most the important regions in the world – crucial to the world’s energy supply i.e. Gulf States in Arab World (GCC) and its regional dynamics with Iran. The Tussle between Shia and Sunni states through proxy warfare is bound to heat up amid an Arms race in the face of Iran Nuclear Deal. In this aspect India could play an important role of Good Offices between GCC Countries and Iran, and Israel and Iran. The role played by Russia in Syria and US in GCC Countries is a focal point on how this region shapes up in face of rising terror organizations like ISIS and AQAP.

It would be fair to sum up that 21st century is indeed the ‘The Asian Century’ through whichever prism you look upon – whether it’s the rising economic powers like China and India or the challenges emanating from radical organizations like ISIS, Al Qaeda in South, South East Asia and West Asia. The world is watching how Asia shapes up in the coming decades and who takes the laurels of being the driver of economic growth and role model for peace for others.

Asian Warrior is a team of young likeminded people working towards the common goal of understanding the dynamic patterns across the globe. Our primary focus is geopolitics to discover social, economic and political patterns in related to foreign policy and national security. We also study its impact and significance on humanity in the times to come.
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